New York Knicks president/general manager Donnie Walsh, in the wake of being overruled in the Carmelo Anthony trade, wanted full autonomy in basketball decisions. He didn't get it.

Knicks owner James Dolan, in negotiations with Walsh over his future with the team, wanted a guarantee of two more seasons of Walsh's work. Dolan didn't get that.

So, on Friday, the Knicks announced that Walsh had been relieved of his duties and that Glen Grunwald would serve as interim G.M. The Knicks' statement says Walsh, whose contract was set to expire at the end of the month, would remain with the team as a consultant.

“Following a long series of discussions regarding his future role with the New York Knicks, Donnie Walsh and I have mutually agreed that he will be leaving his position as president, basketball operations of the Knicks, at the end of June,” Dolan said in a statement. “Donnie will remain with the team as a consultant for the 2011-12 season.

"In a relatively short time with the Knicks, Donnie made a tremendous impact, which will be felt for many years to come. We thank Donnie for his leadership, hard work and many contributions to the revitalization of the team.”

Walsh, 70, told reporters that he decided Thursday that he wasn't up to Dolan's request that he stay on for at least two years.

"I wasn't sure that I wanted to go and devote myself multiyear. On the other hand, I understand why he would want that," Walsh said on a conference call.

Walsh spent three seasons in New York, leading a massive rebuilding job that got the team back into the playoffs this season following the acquisitions of Amare Stoudemire, Chauncey Billups and Anthony.

Walsh and the Knicks had been negotiating a contract extension, but neither Walsh nor Dolan would compromise on who had final authority over the roster.

Walsh hired coach Mike D'Antoni in 2008, but the pairing was an odd mix from the start. Walsh's best teams have been defense-first, half-court types of teams. D'Antoni runs a wide-open, high-scoring game plan.

D'Antoni's future with the club is up in the air, too. He is entering the final year of his contract.

D'Antoni got an endorsement from his now-former boss on Friday.

"I know that he is the guy that can take this team to the next level," Walsh said. "Mike wants to see the job through."

Walsh and D'Antoni arrived in New York following the 2007-08 season and immediately went to work cleaning up the mess left by Isiah Thomas, who had served in both roles. For Walsh, that meant spending two seasons reducing one of the league's highest payrolls, getting the Knicks far enough under the salary cap to afford two top players last summer.

The Knicks got only Stoudemire but traded for Anthony in February and finished 42-40, their first winning record in a decade. They were swept by Boston in their first postseason since 2004, and the roster needs significant upgrades to compete with the top teams in the Eastern Conference.

"I'm not bailing. I do have the team where it is," Walsh said. "I understand that the franchise needs a commitment for more than one year."

Walsh denied any friction with Dolan or Isiah Thomas, whom the owner has remained close with and was nearly hired last summer as an adviser.

Thomas, according to multiple media reports, is not a candidate to take over as general manager or president.

Potential replacements for Walsh, according to Newsday, include former Portland Trail Blazers GM Kevin Pritchard , former New Orleans Hornets GM Jeff Bower, former Golden State GM Chris Mullin and former Denver Nuggets GM Mark Warkentien, currently the Knicks' staff as director of pro player personnel.